If a trip to the grocery store, gas station or your favorite restaurant has you feeling as if prices are still rising, you’d be right. Granted, the first of several planned interest rate hikes by the Fed has not yet taken place. The rate hikes have the intention of stemming inflation. But meanwhile, a tight labor market, supply chain issues, and the price of crude oil continue to put pressure on this inflationary market.
The good news, however, is that the CPI for all urban consumers (CPI-U) indicates that inflation may be showing signs of slowing. The CPI rose just 8.3% year-over-year in April, not seasonally adjusted, compared to historic increases in February and March 2022.
The CPI rose 8.5% in March, the greatest increase since December 1981. In February 2022, the CPI rose 7.9%, with prices reaching historic highs. April’s numbers, on the other hand, did not break any records, overall. However, inflation is still hurting American wallets, especially in the categories of shelter, food, airline fares and new vehicles.
The cost of food rose 0.9% in the past month, showing a 9.4% increase over the past 12 months. The U.S. Bureau of Labor Statistics said this was the largest 12-month increase since April 1981.
On the other hand, the index for gasoline fell 6.1%. This was one of the only categories to show a decrease, in part because of President Joe Biden’s action of releasing strategic oil reserves in early April. In spite of increases in the prices of natural gas and electricity, the index for energy, overall, fell by 2.7% in April.
As people begin their summer travel plans, the index for airline fares skyrocketed by 18.6% in April. Similarly, the recreation index continued climbing, showing an increase of 0.4% after March’s increase of 0.2%. Revenge travel continues to be a trend following the pandemic. With the apparel index falling 0.8% in April, it could be that people are cutting back in certain areas to afford the vacations of their dreams as warmer weather rolls around.
The index for used cars and trucks also fell 0.4%. This index has been dropping steadily for the past three months. In fact, it’s one of the few categories where prices are consistently falling. The index for all items minus food and energy rose 6.2% in the past year, with virtually all major components rising in that time span, according to BLS.gov.
With the first of several interest rate hikes on the horizon for June 1, 2022, U.S. consumers may soon see signs of relief from inflation. After months of trending upward, the 0.3% drop in the CPI-U for April may point to good news for consumers as summer approaches.
More From GOBankingRates
- 6 Groceries Frugal People Buy in Winter
- I'm a Costco Superfan: These Are the 5 Highest-Quality Kirkland Food Items
- 7 Things the Wealthy Elite Do With Their Money (That You Should Be Doing, Too)
- Stay Away From Banks That Are Still Doing This in 2024